Can a system of good governance (yahapalanya) be built on extreme neo-liberalism? My answer is no, based on both theory and practice of many countries.

(August 9, 2017, Sydney, Sri Lanka Guardian) Criticisms on this government from most (not all) of those who supported or spearheaded a political change in January 2015 could not be taken as any effort to bring back the Rajapaksa rule again. Sri Lanka should move forward and not backwards.

Political or social changes in many countries are evolutionary, not revolutionary. Even if there are apparent ‘revolutions,’ those also should be taken within a long spectrum of evolutionary political/social development and not as absolute or abrupt discontinuities. Even in revolutions, there can be major setbacks.

After the French Revolution, the reactionary fall back was popularly called the ‘Thermidorian Effect.’ A similar setback occurred even after the Russian Revolution in 1917, a hundred years ago. These setbacks therefore are more understandable in a parliamentary context.

Understanding January Change

The January 2015 change came about through many contradictions. What can be most appreciated is the people’s resolve to oust the old regime. When we take the ‘people’ as the whole lot of men and women, young and old; they moved decisively at the polling day. Most admirable was the way the minority communities voted for the opposition candidate, Maithripala Sirisena, even with some reluctance. Therefore, the people were determined irrespective of their ethnicity or religion to change the regime.

Although there was some attachment to the old regime, among the majority community, because of its role in defeating terrorism, this became largely changed by August parliamentary elections. They learned through January experience that change is desirable and achievable. The country had to move forward. The 19th Amendment was a decisive progress. If there were no controversial bond scams during the period, the people’s support for a major parliamentary change could have been more decisive. The bond fraudsters gave a life line to the old regime, and still do so.

People’s role in the change was not solely spontaneous. There were politicians, activists, critical media, intellectuals and civil society organizations that brought a new alliance and influenced the people. Civil society organizations were/are not that popular unfortunately in the country because of some NGOs. This is still a liability to move forward. There must be some rethinking. However, some organizations were different, particularly the National Movement for Just Society (NMJS) led by late Ven. Maduluwawe Sobitha Thero and Puravasi Balaya (People’s Power) etc. There was an agreement between the presidential candidate and 52 organizations for good governance, yet to be fulfilled.

Shyamon Jayasinghe has made an important distinction between the Yahapalana movement and the Yahapalana government (Colombo Telegraph, 26 July 2017). This can always be the case. The political alliance that could be worked out at the last moment in November 2014 was immature and mixed with many contradictions. This was far weaker by the time the country went for the general elections in August 2015. The old parties, the power brokers and the funders emerged and took over many of the Yahapalana reins. Even within the Yahapalana movement itself, there were contradictions and immaturities. There were idealists without much realism or practical knowledge. A major weakness was/is the lack of a proper social justice program, based on economic reforms, particularly after the unfortunate demise of Ven. Sobitha.

‘National Unity’ Government

The major liability was the unreformed nature of the two main parties, the UNP and the SLFP, that came to form the so-called national unity government. The JVP was aloof working in its own ivory tower. ‘National unity’ by name, the government did not have common or necessary consensus on national reconciliation. There were no much efforts to rebuild them even from the national reconciliation secretariat. Understandably this is not an easy task. However, this is the main reason for the deadlock in bringing a new constitution. In the whole constitutional reform process, the Prime Minister’s lackadaisical ‘liberalism’ prevailed without leadership, creating opposition within and outside.

The TNA also was not very helpful. Although the leadership has considerably moderated their policies and political positions, they made a major blunder by appointing a maverick leader, C. V. Wigneswaran, to the Northern Provincial Council. The constituent parties of the alliance are also disparate, dominated largely by former militants. This was another reason why building consensus on a new constitution has become so difficult. After nearly thirty years of terrorism, it must be understood that extremely radical changes are not possible.

If the radicals or the idealists, on both sides, tried to depend on the international actors to bring about a ‘defused new constitution,’ it was morally wrong and the international situation also has changed dramatically. Therefore, the prospects for a new constitution are now bleak before the 2020 elections.

The major failure of the national unity government however is in the economic sphere, whether it is in the south or the north. This is something even the Yahapalana civil society movement has not realized. Most important matter for the ordinary people is their day to day living. When the people brought down the old regime, or the family rule, they were not expecting their economic conditions to go backwards or corruption to re-emerge. The bond scam or the Penthouse issue is only the tip of an iceberg. The emergence of criminality and lawlessness in the north are also related to the stagnant economic conditions.

The unreformed constituent parties of the national unity government, mainly the UNP and also the SLFP, are major reasons for recent and ongoing corruption, reinforced by the electoral system. Although Maithripala Sirisena has manged to take over the party apparatus of the SLFP, most of the personnel and the practices are the same. Otherwise, there was no need for a jumbo Cabinet and several ministries, which make the governing inefficient and expensive. It has been the practice of the leaders, the funders and the organizers of these parties to enrich themselves and their organizations through shady business and other deals after coming to political power. As the UNP has come to power after a very long spell, the urge for these corrupt practices could be even higher. Therefore, they are also reluctant in investigating the past corruption.

Questionable Neo-Liberalism?

Can a system of good governance (yahapalanya) be built on extreme neo-liberalism? My answer is no, based on both theory and practice of many countries. The principles of good governance also should apply to the private sector. But neo-liberalism does not allow that. However, a complete opposition to global trends or economics could also bring a type of a government like Donald Trump! That would be the other extreme. It would be a colossal disaster in a developing country like Sri Lanka.

The present government and particularly the UNP leaders are following an extreme form of neo-liberalism without taking any responsibility to build the national economy and the public sector. It is a myth to consider the ‘national economy’ outdated. According to them, the only engine of growth is the private sector. They ask the masses to wait for the trickledown effect, like waiting for Godot. This is in a context where neo-liberalism is failing worldwide. The first round of this failure was the global financial crisis, ten years back. Now, the political opposition has started, however distorted, with Donald Trump and Brexit.

In the Prime Minister’s website as the Minister of National Policies and Economic Affairs, there is an important statement titled ‘Economic Policy of the Government.’ This is a statement that he has made before Parliament, but now the date does not appear. Previously, I criticised the preface to it which said, among other things “Today our economy need no governance, yet a regulation. Hon. Prime Minister Ranil Wickremasinghe says that the aspiration for a prosperous country could be realized merely through more and more liberalization of the economy.”

Now it is taken out! However, the speech is still there, which might become the basis of the next Budget and the intended Three Year Economic Plan. This requires full review later, but for critiquing the extreme neo-liberal policies of the government or the UNP in this article, the following excerpts would suffice. The PM was talking about a third stage of economic reforms after 1977. Here he goes.

“Future economic potential does not rely on labour alone. What is relevant for the development process is innovation and productive growth. In addition to such challenges, we are forced to face welfare and health measures of an aging population in Sri Lanka.”

Now the first proposition is acceptable, emphasizing the importance of innovation and productive growth. Then he attacks ‘welfare and health measures’ as challenges. Then he goes on to say,

“We cannot sustain the belief that the Government must provide all services and solutions. Accordingly, we must be able to pay attention to the spirit of competitiveness and enhancing productivity, while providing a systematic network that affords a strong sense of social protection.”

No one is asking him or his government to ‘provide all services and solutions.’ But at least the existing ‘welfare measures and health services’ must prevail and improved. Otherwise, what is a Government for? Is it only for the crony capitalist class like Perpetual Treasuries or Ravi Karunanayake’s? As far as I know, the legitimate and decent business people are different. Immediately thereafter, the following is what he says, that the people should be beware of by the next Budget.

“Now these may not be popular and may offer a bitter pill to swallow. But we need to take bitter medicine to cure our sick systems and ourselves.”

How to Move Forward?

It is too early to envisage what would be necessary to prevent the old regime, particularly the Rajapaksa family, coming to power again at the next elections, and what kind of a political alliance is necessary to take democracy, social justice and development forward. The JVP could play a major role with other Left parties, if the JVP does not deviate from the democratic path. What is clear at this stage is the necessity to oppose the regressive, lethargic and corrupt policies of the present government, while appreciating the progresses made particularly in creating a relatively free and open political environment.

Rajapaksas are not an alternative, particularly considering corruption, democracy and repression. Take the example of Ravi Karunanayake’s Penthouse issue. Mahinda Rajapaksa was reluctant even to sign the no-confidence motion and only now he says that he would vote against RK. What a leader?

Many civil society organizations who spearheaded the January 2015 change are organizing a Satyagraha on 15 August to demand the government for further reforms. Setting up of a Special Court to investigate Corruption is one admirable demand. However, a major weakness of this civil society movement, in my opinion, is not taking up the economic struggle/s of the ordinary masses.

In conclusion, I wish to focus on several broad elements that might be necessary to take the democratic, economic, human rights and social-justice struggle forward:

Critical and independent media (social media included), journalists and intellectuals who would not take a direct governmental or a political party line.